Bureau of Local Government Finance Opinion

July 19, 1994 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the City Treasurer, City of Mandaluyong, for appropriate action and/or comment, the herein letter of Atty. Floracita P. Flores, Counsel for Family Entertainment Operators Association, Inc., dated June 29, 1994, requesting confirmation that the places of recreation such as the childrens play centers, bowling alleys, skating rinks, and video machine centers located within its (the Citys) territorial jurisdiction" are not subject to the 30% Amusement Tax provided in Section 140 of the Local Government Code of 1991 (LGC) for the following reasons: 1. that the term "amusement places" as defined under Section 131 (c) of the LGC specifically refer only to theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performance excluding those places where a person enters to entertain himself by direct participation such as those "places of recreation" mentioned above: and 2. that the owners or operators of the subject "places of recreation" generally do not charge any admission fee for entrance into their business premises, hence, no tax base for purposes of computing and collecting the 30% Amusement Tax. In this connection, it is emphasized that, while the alleged "recreational places" referred to above may be considered as "amusements places" inasmuch as they are "places" where one could have an "amusement" that is as defined in Section 131 (b) of the LGC, a pleasurable diversion and entertainment, relaxation, avocation, pastime, or fun, attention is invited to Section 140 of the Code which states: "SEC. 140. Amusement Tax . (a) The province may levy an amusement tax to be collected from the proprietors. lessees, or operators of theaters, cinemas, concert" "halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees ." (Emphasis supplied) xxx xxx xxx Evidently, the 30% amusement tax may only be levied and collected on "gross receipts from admission fees." Stated otherwise, in cases where no admission fees are charged, the "amusement place" shall not be subject to the 30% amusement tax. Such establishment, rather, may be taxable by that city under Section 143 (h) of the Code in relation to Section 151 thereof. Advice of action taken hereon within five (5) days from receipts hereof is requested. (SGD.) JUANITA D. AMATONG Undersecretary